Wednesday, January 6, 2021

IRS: Many Won't Receive Stimulus Right Away; Need To Claim When Filing 2020 Taxes

Posted By on Wed, Jan 6, 2021 at 1:38 PM

click to enlarge “Because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar," according to the IRS website. - PHOTO BY 401(K) 2012/CREATIVE COMMONS
Photo by 401(K) 2012/Creative Commons
“Because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar," according to the IRS website.

As the second round of Economic Stimulus Payments begins hitting bank accounts and mailboxes nationwide during the first week of 2021, many Americans will have to wait until they file their 2020 tax return to claim their cash.


Funds officially became available on Monday, Jan. 4, with some taxpayers receiving their payment the week prior. However, many Americans who filed their 2019 tax return using H&R Block or TurboTax are complaining of either getting a cryptic “Payment Status #2” message or their funds were sent to an unknown bank account.


The Internal Revenue Service announced on their website taxpayers who are receiving a “Payment Status #2 – Not Available," message when using the IRS’ Get My Payment tool “will not receive a second Economic Impact Payment and instead you need to claim the Recovery Rebate Credit on your 2020 Tax Return."


IRS officials note the recent stimulus payment is an advance on the Recovery Rebate Credit and they are under a “compressed timeline” to distribute funds by Jan. 15.


“Because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar. By law, the financial institution must return the payment to the IRS; they cannot hold and issue the payment to an individual when the account is no longer active,” according to the IRS website.


The credit will be available on this year’s Form 1040 or Form 1040-SR. Any taxpayer who filed their 2019 taxes and did not receive either the first or second stimulus payment may be eligible and is encouraged by the IRS to claim the credit on their upcoming 2020 taxes.


While the IRS has not released an official date on when they will begin accepting 2021 tax returns, historically they start accepting them between Jan. 15 and Feb. 1.


Under the recent Economic Stimulus Payment, individuals are eligible for $600 and married couples who file a joint return will receive $1,200. In addition, citizens could receive an extra $600 for each qualifying child. Dependents over the age of 17 are not eligible for the child payment. Individuals who filed an adjusted gross income of more than $75,000 or married couples who made more than $150,000 in 2019 are ineligible for the payment.

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